UK pledges cash support for low-income households amid cost of living crisis

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By Euronews  with Reuters
Pedestrians pass a closed down money exchange shop on Oxford Street in London, Friday, Nov. 11, 2022.
Pedestrians pass a closed down money exchange shop on Oxford Street in London, Friday, Nov. 11, 2022.   -  Copyright  Kirsty Wigglesworth/Copyright 2022 The AP. All rights reserved

Millions of low-income households in the UK will receive cost of living support in the coming financial year, the government said on Tuesday. 

Poorer homes will be given cash payments of up to £900 (€1,022) to help them deal with soaring prices, according to the country's Department of Work and Pensions. 

The money will go directly into claimants' bank accounts in three payments over the financial year, which starts on 6 April.

Like most of Europe, the UK is currently being battered by a cost of living crisis that is hitting poorer households hard. 

Annual inflation reached 11.1% in October, a 41-year high. But price rises have since eased off, coming in at 10.9% in December. 

Chancellor Jeremy Hunt announced the financial help in his Autumn statement last year, along with a string of tax increases and reductions in public spending.  

The government has not yet given details on when the payments will be made. 

Several economists have warned that the UK's cost of living crisis will continue into 2023, even though the pace of price rises has slowed in recent months. 

Inflation is being fuelled by the war in Ukraine, though the cost of living has been increasing across the UK since early 2021, according to the UK government. 

There will also be separate support of £150 (€170) for more than six million disabled people and £300 (€340) for some eight million pensioners, the department said. 

The latest support package follows a £1,200 (€1,365) cash support programme for low-income households last year. 

Poorer households are suffering an even higher inflation rate than average, according to the Resolution Foundation, an independent UK think tank. 

Speaking to the Guardian, Jack Leslie, a senior economist at the Resolution Foundation, said: "Britain may now be past its inflation peak, which is good news for policymakers at both the Bank and Treasury as they grapple with rising interest rates and public debt."

"But with price rises still massively outstripping pay rises – and Britain’s poorest families facing an inflation rate of over 12 per cent – families are still getting poorer month-on-month, and the cost-of-living crisis will continue to deepen in 2023," he added.